How do new laws on real estate taxation affect my tax burden?
August 23, 2023 | 50,00 EUR | answered by Tatiana Seiler
Dear tax advisor,
My name is Luisa Schlüter and I am the owner of a rental apartment. In recent months, I have heard about new laws regarding property taxation and I am wondering how these will affect my tax burden. So far, I have declared my rental income in my annual tax return and paid taxes accordingly.
Now I am concerned that the new laws could increase my tax burden and I am unsure of how to best prepare for this. I would like to understand the specific changes that will affect me and if there are ways to optimize my tax burden to avoid financial losses.
Could you please explain in detail which new laws regarding property taxation have come into effect and how they will impact me as a landlord? Are there specific tax advantages or disadvantages that I should be aware of? What measures could I take to minimize my tax burden and protect my assets?
I appreciate your professional advice in advance and look forward to your assistance in clarifying my questions about property taxation.
Sincerely,
Luisa Schlüter
Dear Ms. Schlüter,
Thank you for your inquiry regarding the new laws on property taxation and their impact on you as the landlord of a condominium. It is understandable that you are concerned about possible financial losses and are therefore looking for ways to optimize your tax burden.
In recent years, there have been indeed some changes in the area of property taxation that also affect landlords. One of the significant changes concerns the abolishment of the declining depreciation for buildings acquired or manufactured after December 31, 2021. This means that you, as a landlord, can no longer claim declining depreciation to reduce your tax burden.
Another important change concerns the tax treatment of maintenance and modernization costs. For some years now, such costs can no longer be immediately deducted as operating expenses but must be depreciated over a longer period of time. This can lead to an increase in your tax burden, as the tax relief from depreciation is lower.
However, there are also ways to minimize your tax burden and protect your assets to the best of your ability. One of these is the so-called monument depreciation, which allows for tax-favored depreciation of listed buildings. If your condominium is listed as a monument, you could benefit from this special depreciation and reduce your tax burden.
Furthermore, you may consider whether it is beneficial to transfer your rented condominium to a GmbH (limited liability company). By establishing a GmbH, you may potentially take advantage of tax benefits and better protect your assets. However, such a measure is associated with higher bureaucratic and tax requirements, so you should seek comprehensive advice on this matter.
Overall, it is advisable to seek advice from an experienced tax advisor to analyze your individual situation and develop the best possible measures to optimize your tax burden. I am happy to provide you with personal consultation and help clarify your questions regarding property taxation.
Best regards,
Tatiana Seiler
Tax Advisor
